[DNSB]

I would suggest checking the Attempt to support newer firmware checkbox in the KoboTouch/KoboTouch Extended driver settings. See the Metadata, on device & advanced tab for the setting. I've attached an image of the setting as well. This should deal with the database version issue.

Your communication issue is possibly a database corruption issue. If you have the KoboUtilities plugin installed, use it to check the database. If you don't, install it. If it shows database integrity issues, I'd suggest signing out of your Kobo account and then signing back to correct the issue.

As for saving highlights and notes, there I can't offer much help. I've used the Annotation plugin a couple of times to retrieve annotations from a Kobo but since the majority of my usage is to mark errors for correction, I've never worried about restoring annotations to a Kobo and am not sure if there a way to easily do this.